Causes of Globalization

1. Improved transport: Making global travel easier. For example, there has been a rapid growth in air
travel, enabling greater movement of people and goods across the globe.

2. Containerisation: From 1970, there was a rapid adoption of the steel transport container. This
reduced the costs of inter-modal transport, making trade cheaper and more efficient.

3. Improved technology: which makes it easier to communicate and share information around the
world. E.g. internet. For example, to work on improvements on this website, I will go to a global online
community, like elance.com. There, people from any country can bid for the right to provide a service. It
means that I can often find people to do a job relatively cheaply because labour costs are relatively
lower in the Indian sub-continent.

4. Growth of multinational companies: with a global presence in many different economies.

5.Growth of global trading blocks: which have reduced national barriers. (e.g. European Union, NAFTA,
ASEAN)

Reduced tariff barriers which encourage global trade. Often this has occurred through the support of the
WTO.

Firms exploiting gains from economies of scale to gain increased specialisation. This is an essential
feature of new trade theory.

6. Global trade cycle: Economic growth is global in nature. This means countries are increasingly
interconnected. (e.g. recession in one country affects global trade and invariably causes an economic
downturn in major trading partners.)

7. Financial system: increasingly global in nature. When US banks suffered losses due to the sub-prime
mortgage crisis, it affected all major banks in other countries who had bought financial derivatives from
US banks and mortgage companies.

8. Improved mobility of capital: In the past few decades, there has been a general reduction in capital
barriers, making it easier for capital to flow between different economies. This has increased the ability
for firms to receive finance. It has also increased the global interconnectedness of global financial
markets.

9. Increased mobility of labour: People are more willing to move between different countries in search
for work. Global trade remittances now play a large role in transfers from developed countries to
developing countries.
Characteristics/Features of Globalization

1. Borderless: Globalization is about an increasingly borderless world and its societal consequences. The
causes of globalization are technological, economic and ideological.The societal consequences are very
much in terms of the diminishing capacity ofgovernance by governments and in relation to that the
rebound (the counter effects both in terms of attitudes and of institutions) against aspects of
globalization; against the dominance of the market (economization), against Americanization and in
reaction to the diminishment of quality of life.

2. Information Technology Changes: Increase in information flows and greater transporter data flow
between geographically remote locations. Arguably this is a technological change with the advent of
fiber optic communications, satellites, and increased availability of wireless telephone and Internet.

3. Mobility: The characteristic of globalization given more mobility and less transport costsmeans per
definition more competition and more dynamism. "However, that competition does not mean per se
increased trade flows. Therefore economists defining globalization in their simplified approach as
increased trade flows have to conclude per definition that there is not much globalization."

4. International Cooperation: The increasing of the multinational corporations, regional and global
organizations leads to the members of the international community expanding from a singlenation to
the transnational corporations, international organizations, and international non-governmental
organizations. In these three groups of actors, exceptfor the individual international military treaty
organization, only the countryand country alliance have the capability of "plate movement".

5. Talents Mobility and Integration: Globalization has increased the growth of the multinational
corporations, and also brought the talent mobility and integration. More and more personnel
dispatched by the corporations to the branches in other countries, and they learn and share the
experience or do the project with the local employees. This kind of talents mobility and cooperation can
increase the business performance.

6. Cultural Diversity: Because of the globalization and new technology, it has been found that
culturaldiversity reflects on the food, music, art, life style, customs and race. The western culture has
mixed with the eastern culture. For instance, McDonalds Corporation has expanded to be world wide,
and you can see the logo of everywhere. Also, the Hollywood movies are very popular in Asia.
Globalization has not only promoted cultural blending, but also driven a lot of business opportunities.

7. Liberalization: The freedom of the industrialist/businessman to establish industry, trade or commerce

either in his country or abroad; free exchange of capital, goods, serviceand technologies between
countries.

8. Free Trade: Free trade between countries; absence of excessive governmental control over trade.

9. Globalization of Economic Activities: Control of economic activities by domestic market and

international market; coordination of national economy and world economy.
10. Connectivity: Localities being connected with the world by breaking national boundaries; forging of
links between one society and another, and between one country and anotherthrough international
transmission of knowledge, literature, technology, culture and information.

11. A Composite Process: Integration of nation-states across the world by common economic,
commercial, political, cultural and technological ties; creation of a new world order with nonational
boundaries;

12. A Multi-dimensional Process: Economically, it means opening up of national market, free trade and
commerce among nations, and integration of national economies with the world economy. Politically, it
means limited powers and functions of state, more rights and freedomsgranted to the individual and
empowerment of private sector; culturally, it means exchange of cultural values between societies and
between nations; and ideologically, it means the spread of liberalism and capitalism.

13. A Top-Down process: Globalization originates from developed countries and the MNCs
(multinational corporations) based in them. Technologies, capital, products and services come from
them to developing countries. It is for developing countries to accept these things, adapt themselves to
them and to be influenced by them.As a result, the values and norms of developed countries are
gradually rooted indeveloping countries. This leads to the growth of a monoculture - the culture of the
north (developed countries) being imposed on the South (developing countries). This involves the
erosion and loss of the identity and the cultures of developing countries. Globalization is thus a one-way
traffic: it flows from the North to the South.